Demand For 50-seat RJs Remains Solid, Skywest Says

Lower fuel prices favor economics of smallest passenger jets.

Regional-jet giant Skywest Inc. continues to see solid demand for its smallest regional jets even as it continues an upgauging effort that is bringing in Embraer ERJ-175s.

"Demand for our remaining 50-seat aircraft remain very strong, and we are working with each of our major partners to meet their ongoing 50-seat needs," says Skywest COO Wade Steel.

The company, which operates Skywest Airlines and ExpressJet Airways and has contracts with Alaska Airlines, American Airlines, Delta Air Lines, and United Airlines, started the year with 652 aircraft in its fleet, including 372 Bombardier CRJ 100s/200s and Embraer ERJ 135s/145s. As of Sept. 30, it was down to 604 aircraft. Among the changes: removals of 12 CRJs and 41 ERJs. It plans to end the year with 592 aircraft, including 304 smaller RJs—196 CRJs and 108 ERJs

The company's fleet changes focus on adding dual-class E175s. It started the year with 86, and plans to have 107 by yearend, including the first aircraft delivered from a 45-aircraft order announced in October. Skywest plans to have 149 E175s in service by 2019.

While mainline operators are embracing dual-class regional jets as an extension of their in-service branding, 50-seaters—most of them single-class—continue to play a role. Among the reasons: sustained low fuel prices, which make the small jets more feasible to operate that they were before oil prices dipped in mind-2014.

"We've said for a long time that we're still fans of the 50-seat aircraft," says Skywest President and CEO Chip Childs. "There is the unique niche in how we can continue to provide excellent service to existing and potentially new communities with 50-seaters and given the dynamics of scope and everything like that, I think that we're still very comfortable and confident in the size of fleet."

While some demand remains, Aviation Week's latest Commercial Fleet & MRO Forecast projects a steady parking of the 50-seat fleets over the next decade. The CRJ 100/200 fleet will shrink from 518 next year to 207 in 2021 before declining more gradually, to 111, in 2027, the forecast says. The ERJ 135/140/145 fleet will dip from 486 in 2018 to fewer than 100 in 2024, and just 63 in 2027.

TAGS: Airframe
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